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MARKETING APPROACHES TO POP-UP STORES: EXPLORATION OF SOCIAL NETWORKING Dr Ruth Marciniak (for correspondence) London Metropolitan University Londonmet Business School North Campus Stapleton House 277-281 Holloway Road London N7 8HN UK Email: [email protected] Corinna Budnarowska Bournemouth University School of Services Management Talbot Campus Poole Dorset BH12 5BB UK Phone : 01202 965579 Email : [email protected] Key words: social networking, entrepreneurial marketing, fashion retailing, pop-up stores Word count: 4,855 Abstract Internet and mobile technologies are redefining how retailers promote themselves to consumers. For instance, over recent years, the high street has witnessed the phenomenon of ‘pop up stores’, which rely on social network sites (SNS) and text messaging to inform consumers of their presence. In essence, they are retail stores that open up at empty retail locations for a temporary period of time and then disappear. The purpose of this paper is to describe this trend in terms of which retailers are doing it, why, where and how are they doing it? In addition, the paper is theoretically underpinned by an examination of literature drawn from entrepreneurial marketing in order to explore how retailers have exploited internet and mobile technologies in order to create marketing and branding opportunities. Finally, the paper offers directions for future research. MARKETING APPROACHES TO POP-UP STORES: EXPLORATION OF SOCIAL NETWORKING Abstract Internet and mobile technologies are redefining how retailers promote themselves to consumers. For instance, over recent years, the high street has witnessed the phenomenon of ‘pop-up stores’, which rely on social network sites (SNS) and text messaging to inform consumers of their presence. In essence, they are retail stores that open up at empty retail locations for a temporary period of time and then disappear. The purpose of this paper is to describe this trend in terms of which retailers are doing it, why, where and how are they doing it? In addition, the paper is theoretically underpinned by an examination of literature drawn from entrepreneurial marketing in order to explore how retailers have exploited internet and mobile technologies in order to create marketing and branding opportunities. Finally, the paper offers directions for future research. Keywords: social networking, entrepreneurial marketing, fashion retailing, pop-up stores Introduction Pop-up stores wherein retail brands take up temporary residence in empty retail property spaces are not something new. Traditionally, it has been discount shops, for example, one pound shops, who take advantage of empty retail units in order to off load end of lines (Barr 2008). Indeed, historically the notion of pop-up stores is decade’s even centuries old, taking on different formats. The original ones being developed by our ancestors who moved from producing all their own goods to trading surplus items concentrating this activity in particular areas, operating from market stalls, which contributed to the development of market towns (Sullivan 2002). Indeed mobile pop-up stores have been around for a long time in the form of ice cream and fish and chip vans (think of Roddy Doyle’s ‘The Van’) even hawkers and pedlars can be defined within the category of pop-up retailers. In addition, within the last decade there has been a growth in farmer’s markets, which have served to provide additional outlets for entrepreneurial small-scale farmers and producers (Bentley et al. 2003). However despite the success of farmers’ markets, media attention has been focussed on mainstream global or established brands that have moved into pop-up stores as part of their overall multichannel retail offering. These companies, such as The Gap, Levis, American Apparel and Comme des Garcon, communicate locations of pop-ups and timing via the Internet and mobile technologies using text, email and social networking sites such as Twitter and Facebook. In addition, they are selling their products, often along with creating theatrical experiences where ‘spectacle comes first’ (Trendwatching, 2003). Just as, in the UK, ice cream vans pop up outside school gates evoking excitement and compelling children through offering them something that is limited, discovery-driven and of the moment, in today’s retail environment, pop-up stores attempt to evoke the same excitement. From a practitioner perspective, in the current economic climate, evidenced in a downturn in the retail sector (Benigson 2008), pop-up stores present an opportunity for retailers to stimulate demand for their brand and test the market with new products. From an academic perspective, internet and mobile technologies have increasingly attracted the attention of researchers who have explored their affordances and reach (Boyd & Ellison 2007; Acar & Polonsky 2007; de Souza e Silva 2006; Page 2008) but limited attention has been paid to the specific employment of these technologies by retailer who are using SNS and text messaging as part of their marketing communications strategy. Hence, the purpose of this paper is to explore, with specific reference to pop-up stores, how retailers are currently using the technologies to create marketing and brand opportunities. In addition, the paper focuses on fashion retailers as fashion consumption is understood to involve, for many individuals, a high degree of social interaction (Kim et al. 2008). Hence examination of fashion adoption through social diffusion via the internet and mobile technologies will prove to be more fertile than examination of other retail sectors such as grocery. To sum up, the rationale for examining the topic under investigation includes: 1. Pop-up stores have had little attention from the retail or marketing academic community. 2. Fashion consumption and dissemination is of particular interest as it has traditionally relied on social relationships and word of mouth in respect of new product developments. The paper is structured as follows, the first section examines which retailers are engaging in pop-up stores as part of their multichannel strategy together with what, why, where and how they are doing it. The second section offers a literature review on viral marketing by way of exploring how retail brand engagement is facilitated through network connectivity and web site interactivity. Finally the paper offers conclusions and proposes areas for future research. Pop-up Shops: What, why, who, where and how? Pop up shops, also known as guerrilla stores and retail installations, are evidence of creative and enterprising methods of marketing communications, which has gone beyond traditional print and broadcasting mediums (Baker 2008) wherein their primary aim is to build brand awareness, making sales is a secondary function. In all, as Tran (2008) points out, ‘it gives people a taste of your product and keep it fresh and always on people’s minds”. In addition, pop-up stores may typically offer limited edition brands in order to create a sense of urgency within the shopper as the offer will not be there forever. For example, Nike (NKE) opened a pop-up store for four days only with the specific purpose of selling only 250 pairs of limited edition basketball shoes Gogoi 2007). Why? Cost advantages can be accrued by way of pop-up stores as they rely on viral or word of mouth marketing techniques to put out the message that a temporary store has been set up. Therefore the retailers do not have to rely on heavy advertising costs (Baker 2008; Gogoi 2007). Further to this, a pop-up store can be cheaper than a full shop fit out. In addition, pop-up stores may be used as a method of brand dissemination across international markets. For instance, K-Swiss, the American footwear and apparel retailer, created a pop-up store in Paris as part of their ‘brand activation plan’ in order to further establish themselves in the French market, as they were not as well recognised there as in other areas of Europe and the UK (Baker 2008). Similarly, in order to raise its profile in a new international market, Uniqlo, the Japanese fashion retailer drove two shipping containers around New York City, giving consumers a clear message that they were literally coming from Tokyo to New York (Gogoi 2007). Pop-up stores tap into the current zeitgeist, evidenced through flashmobs Wherein retail brands are keen to align themselves with aspects of youth culture (Baker 2008). Indeed in the current uncertain economy, the here today, gone tomorrow nature of pop-up stores are attractive (Tran 2008). Pop-up stores also tap into the trend of massclusivity (Trendwatching 2003), wherein exclusive no longer means being expensive. Rather, appealing to consumers through offering a sense of discovery and buying something that perhaps no one else may have, that is, ‘the best kept secret in town’ (Benigson 2008). Further to this, Barr (2008) suggests that ‘pop-ups are the epitome of our high-speed, short-attention-span culture’. In all, pop-up stores fit into the Entertainment Economy and the Experience Economy as they are about surprising consumers with temporary ‘performances’ (Trendwatching 2008). From an economic perspective, the price of retail property is very expensive, as pointed out by Philip Green, who challenged UK property companies to lower their rents in order to make way for future creative talents and young businesses. He identified that property companies not having done this has led to retailing ceasing to offer anything new (Benigson 2008). As a consequence, in the case of the UK, the national has been tagged with the name ‘clone town Britain.’ However in such an environment, pop-up stores present a much needed differentiation in the high street. In addition, they also present landlords the opportunity to exploit temporary empty stores thereby incurring ‘windfalls’ of income (Commercial Property News 2006). Nevertheless pop-up stores are not easy to set up. One of the main problems is the reliance on unoccupied stores in desirable retail locations, which can be difficult to come by. Who? Table 1, whilst by no means fully comprehensive, offers a list of fashion retailers who have developed pop-up stores. Examination of the table indicates that they range from large international retailers, for example Nike, to designer, for example Any Hindmarch to cult retailers, for example, PPQ. In terms of market positioning, they range from discount to luxury. However what is common to all of them is positioning in terms of age as they all sell to the young adult market. Insert table 1 here Where? Similar to observations made by Doyle et al. (2008), wherein they identified the establishment of a flagship store provided companies with an opportunity to provide a context for their brand, this too can be argued for pop-up stores. Both retail formats offer value in terms of a brand communication achieved through sourcing key fashion locations. Flagship stores are typically located within fashionable and economically significant capital cities (Fernie et al. 1998), likewise pop-up stores have followed the same approach. Hollander (1970) identifies this location strategy as the ‘New York, Paris, London syndrome.’ As Hollander points out, such cities are targeted in order to increase the appeal of the fashion retailer’s name. Further to this, neighbourhoods selected for the location of pop-up stores are also key. For instance, Table 1 lists trendy locations such as London’s Brick Lane or New York’s Soho area, again with the purpose of increasing the attraction of the retail brand. Indeed the study by Law et al. (2004) identified that the perception and receptivity of a new fashion or fashion retail brand can be judged from the shopping area in which it is located. In all, location as a trend indicator for a fashion brand. How? To date, pop-up stores have taken various formats, either being mobile, in that they move around to different locations or bricks and mortar in the form of high street locations. In addition, there have been pop-up stores that are kiosks based within shopping malls. In all, this form of trading format has the potential to create memorable experiences for customers (Pine & Gilmore 1999). Obtaining memorable experiences requires tapping into customer emotions, the customers need for fun and hedonistic experiences and also understanding the significance of symbolism as part of the consumer’s consumption process (Addis & Holbrook 2001) In order to achieve an aim of the paper, this being to explore how retailers have exploited internet and mobile technologies in order to create marketing and branding opportunities a theoretical examination needs to be undertaken. This will provide a greater understanding of the how of pop-up stores and is dealt with in the following section. Identification of marketing approaches that facilitate marketing communications vis a vis pop-up stores Today’s businesses operate in a competitive landscape that has been characterised by four over riding forces, these being, change, complexity, chaos and contradiction (Hitt and Reed 2000). These forces impact upon the retail industry as they increasingly operate in an environment of increased risk, blurred sector boundaries, increased channels to market and more demanding customers in terms of wanting something new. To deal with the changing competitive landscape, a number of alternative marketing approaches, as identified by Morris et al. (2002) have been introduced over the past two decades including expeditionary, guerrilla, disruptive, radical, counterintuitive, buzz, viral and convergence marketing. Each of these vary in their approach in terms of their tactical versus strategic focus, emphasis on promotion versus entire marketing mix and focus with regards to small ventures versus established firms (Morris et al. 2002). However commonalities exist, these being that they offer creative and alternative approaches for managing marketing and product, process and, in the case of retailing, format innovation. An umbrella term for these various marketing approaches is entrepreneurial marketing, which Morris et al. (2002,5) propose is an integrated construct for conceptualising marketing and define as: “an opportunistic perspective wherein the marketer proactively seeks novel ways to create value for desired customers and build customer equity.” Guerrilla, viral and buzz marketing are key approaches, which at a tactical level, have the most applicability to pop-up stores. Guerrilla marketing has been defined as ‘low cost, effective communications, cooperative efforts and networking; leveraging resources, using energy and imagination” (Levinson 1993). Viral marketing involves word of mouth communicated via electronic media such as the Internet via its bulletin boards, chat rooms, email, complaint sites discussion groups and social networking sites such as Facebook, Youtube and Twitter (Rice 2001). Mason (2008, 207) defines word of mouth as involving “activities that are likely to encourage consumers to talk about a product or company to their friend … setting in motion a chain of communication that could branch out through a whole community.” Therefore it is consumers who initiate the dissemination and control to whom communications are sent. Hence it is the consumer who is empowered to potentially create status for the brand and can also assist in reducing the need for traditional media advertising. An additional benefit is that both word of mouth and viral marketing is seen to be more credible than media advertising because it is seen to be independent of the marketer (Table 2). For instance, Rice (2001) reports that 80% of brand decisions are influenced by someone other than the marketer of the brand. However viral marketing compared to traditional word of mouth marketing is a more focussed medium as consumers will typically communicate their views on dedicated web sites such as fashion forums. In addition, via the Internet, their views can reach a wider audience, that is, on a national or global scale (Woerndl et al. 2008). Insert Table 2 here Finally, buzz marketing involves consumer generated information dispersed through social networks by creating excitement (Rosen 2000). Internet and mobile technologies are key factors that have led to its use (Morris et al. 2002). To sum up, in terms of usage of electronic technologies, guerrilla marketing is not dependent on them, viral marketing is and use of buzz marketing has been encouraged by them. Common to both viral and buzz marketing is that the consumer does the selling. Identification of social actors that facilitate marketing communications vis a vis pop-up stores Along with salesmen, Gladwell (2000) identifies two other actors who are key in the social network process, who too facilitate the marketing communication being spread. The first is ‘mavens’, derived from Yiddish meaning one who accumulates knowledge, or what Dye (2000) refers to as ‘vanguard consumers’. These are individuals who in a commercial sense, through personal interest, for example a hobby, are intense gatherers of product or service information. Secondly, Gladwell (2000) identifies connectors who will have a large social network of acquaintances drawn from various groupings. The importance of the role of this actor type has been empirically born out by Woerndl et al. (2008). In their study, which sought to identify critical success factors for a viral marketing campaign, they identified that the success of a campaign was derived from the personal desire for social interaction, as this was important in attracting users’ interest and speed of dissemination of communication. Gladwell (2000) indicates that an individual who fits into two or move of the above actor types would be very effective in enabling viral marketing to occur. This type of individual is what Vargo and Lusch (2004) refer to as a ‘proactive co-producer.’ In all, viral marketing does not treat consumers as a target wherein something is done to them, which is how they are treated within traditional marketing concepts (Morris et al. 2002). Rather, Gladwell (2000) identifies these three types of actors as selected individuals who contribute to his theory of explaining how social events develop. He considers that there are few people who could be classified as either salesmen, mavens or connectors, therefore he refers to them as the ‘law of the few’. Two further laws are identified to explain the occurrence of social events, these being, firstly the stickiness factor wherein some aspect of the product or service is so intriguing or eye catching that it will initiate adoption. For example, Uniqlo’s container vessels sailing down the Hudson river in New York, which successfully compelled consumers to go and investigate. The final law is the ‘power of context’. This refers to how the idea or message is conveyed. Gladwell (2000) considers that this has a direct relationship with how well the message is accepted. For instance, the finite life span of pop-up stores adds to the sense of immediacy and significance of visiting the retail format. Mason (2008) points out that these three laws are based upon the concept of chaos theory, which is dependent upon minor changes or insignificant factors, in this context, the social system, which in turn can have significant effects on the result of the system. In addition to Gladwell’s (2000) typology of social actors who are involved in the social network who take of the role of dissemination of products and services, Acar and Polonsky’s (2007) examines social actor types in terms of personality traits. Their study established that individuals use virtual networks in order to communicate their brand use and opinion leaders, defined as people who are innovative, technically competent and heavy media users (Rogers 2003), are more likely to openly communicate about brands. However they spend less time and have a smaller online social network. Alternatively, opinion seekers, defined as susceptible to interpersonal influence (Bearden et al. 1989) were more likely to spend more time using SNS such as Facebook, and in doing so, increasing their social network. Hence whilst opinion seekers will spend more time networking, opinion leaders will be more likely to offer more information. Other factors that affected online social network size were gender and extroversion as females and extroverts were more likely to have larger social networks. Therefore in terms of proactive co-producers opinion leaders and opinion seekers are not conducive to contributing to social events such as disseminating information about popup stores. As neither have both a large social network and a large knowledge base, rather then excel at one or the other. However according to Price (1987) opinion leaders are more likely to be salesmen as they tend to provide marketplace and shopping information to others. Yet, as Gladwell (2000) points out, opinion leaders are not necessarily mavens. For example, someone may be so self absorbed with a specific hobby that they do not have the time to be salesmen. Social network sites and fashion dissemination The use of SNS by individuals interested in fashion is vague. For example, although no metrics are available, there exists a good number of SNS specifically dealing with fashion. In particular blogs are popular (albeit incomplete, see Table 3 for examples of various types of fashion blog sites). However no study exists that has empirically tested the relationship between blog sites and the commercial success of, for example, the brands, pop-up stores they identify and discuss. Undertaken by the researchers, an anecdotal examination of a snap shot of currently existing fashion blog sites indicate that common characteristics exist. These characteristics include links to other fashion blog sites, thereby self perpetuating, few commercial links, and often images of the blogger modeling a recent fashion purchase or self made creation. Often bloggers will show the purchases that they made and comment upon why they liked them. An example of this kind of site is garbagedress.blogspot.com. Fashion consumption is explicit in that, for example, when an individual walks into a room others will be aware of what that person is wearing. Hence intentional or not, individuals are by default ‘selling’ fashion (albeit in a positive or negative way!) and thereby performing the role of one of Gladwell’s (2000) social actors. When fashion goods are branded, selling is overt, that is, heightened conspicuous consumption (Trigg 2001). Likewise, an individual using a SNS, for example a blog, to discuss a fashion designer or a favourite retail brand, are also performing the role of a salesman. Indeed SNS used in this way is confirmed in Acar and Polonsky’s (2007) study of the impact of opinion leadership and opinion seeking on brand communication. For their findings suggest that 46% of Facebook users join brand groups or use brands to express themselves via online platforms. However whilst this finding indicates the willingness to share brand experiences, it does not identify whether these users were opinion leaders or opinion seekers. Users of social network sites use Internet technologies in order to express their own opinion, help interpret and dissemination information, act as opinion leaders or simply talk about something they are interested in. However there exists a lack of research to indicate whether those who talk about brands via SNS, as identified in Acar and Polonsky’s study, are indeed opinion leaders or opinion seekers. In all, retail marketers are dependent upon SNS users to dissemination information about the opening of a pop-up store, yet no empirical research has been established to identify what role, for example, bloggers, twitters or Facebook users adopt whilst they are using Internet and mobile technologies. This presents a short fall in our understanding of the role of SNS for entrepreneurial marketing purposes and is of particular importance in terms of fashion consumption as traditionally fashion marketers have acknowledged the important role opinion leaders play in the fashion consumption process (Goldsmith and Clark 2008). Conclusion This paper has synthesised the emerging body of literature on marketing approaches relevant to pop-up stores. In summary, it raises a number of fundamental issues. First, pop-up stores have relevance beyond a mere function and direct profit generation. The second is that these stores provide a context for the retail brand. Likewise, with regard to the physical pop-up store, the location also serves as a context as it communicates where the retailer is positioned in the marketplace. Pop-up stores offer an attractive channel to market for several reasons, it gets around the exorbitant price or property, albeit on a temporary basis and it offers consumers an innovative, discovery-driven retail experience. For the imminent future, retailers face particularly tough marketing conditions. Therefore gaining an in-depth insight on the dialogues consumers are having via the Internet and mobile technologies, together with who is having them, in terms of their personal characteristics and roles that they adopt, will enable marketers to remain competitive. Pop-up stores and associated guerrilla, viral and buzz marketing are rich in research opportunities. Empirical evidence will bring in-depth understanding fostering knowledge creation relating to alternative retail formats. Future research could involve: • What makes a source of communication credible? • Identify characteristics of viral marketing messages that have been successfully diffused in order to disseminate information regarding pop-up stores. • Identify personal characteristics or and roles adopted by fashion SNS users • Relationship between individual characteristics and propensity to disseminate information. References Acar A.S., and Polonsky M. 2007. Online social networks and insights into marketing communications. Journal of Internet Commerce 6(4):55-72 Addis, M., and Holbrook M. 2001. On the conceptual link between mass customisation and experiential consumption: An explosion of subjectivity. Journal of Consumer Behaviour, 1(1):50-66. Baker R. 2008. In store marketing. p.35-39 Barr D. 2008. The pop-up shop phenomenon. The Sunday Times, December 28th 2008 Bearden W., Richard G., Netemeyer J., & Teel E. 1989. Measurement of consumer susceptibility to interpersonal influence. 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Internet-induced marketing techniques: critical success factors in viral marketing campaigns, International Journal of Business Science and Applied Management 3(1):33-45 Table I Examples of Fashion retailers engaging in pop-up stores |RETAILER |Store Format |Length of |location |Year | | |opening | | |American |Physical |45 days |New York | |Apparel | | | | |Target, |Physical & |5 weeks |New York, Lower |2003 |discount |Mobile/floatin| |Manhattan |2004 |fashion |g on the | | | |franchise |Hudson river, | | | | |New York | | | |Comme des |Physical |1 year |Berlin, Germany |2004 |Garcon, | | |Los Angeles | |designer brand | | |Singapore | | | | |Glasgow | |JC Penney |Physical |n/k |New York |2004 |Bluefly.com, |Physical | |New York | |online US | | | | |fashion | | | | |retailer | | | | |Nike (NKE) |Physical |4 days |New York, Soho | |The Gap (GPS) |Mobile/School |n/k |Los Angeles |2007 | |bus | |New York | |Wal-Mart (WMT),|Physical |2 days |Miami |2007 |fashion line | | | | |Metro 7 | | | | |Uniqlo |Mobile/2 |2 months |New York, |2007 | |shipping | |Brooklyn | | |containers | | | | | |2 -18 May | |2008 | | | |London, Brick | | | | |Lane | |K-Swiss |Physical |3 weeks |Paris, Citadium |2008 | |within a store| | | |Vintage |Physical |2 months |London |2008 |Emporium | | | | |Barnado’s |Physical |4 weeks |London |2009 |Vintage Store | | | | |The Jackdaw |Physical |During |London, |2009 |Store selling | |February’s |Burlington Arcade| |PPQ | |London | | | | |Fashion Week| | |Primrose Bakery|Physical store|22-27 |London |2008 |at Anya |within a store|September to| | |Hindmarch | |coincide | | | | |with | | | | |Hindmarch’s | | | | |new | | | | |collection | | |Scarlet & |Physical store|15 - 18 | |2008 |Violet florist |within a store|October | | |at Anya | | | | |Hindmarch | | | | |Kangol |Physical store|n/k |London, |2008 | | | |Nottinghill | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |Camper |Physical | | |Samaritans |Physical |Nowhere, |Physical |collaboration |within a |between A | |Bathing Ape and| |Undercover | store|n/k | store|n/k store|n/k store| | | | |London, Brick |Lane |London, Fulham |London, basement |of Dover Street |Market | | |2008 | |2008 |2009 | | | | | | | | | | | | Table 2: Potential Benefits and Drawbacks of Viral Marketing (adapted from Woerndl et al., 2008) |Category |Benefit |Drawback | |Financial |Inexpensive compared | | | |to traditional | | | |advertising | | |Speed of diffusion|Faster than word of |Dependent upon when | | |mouth |the sender chooses to | | | |post email message on | | | |discussion board etc. | |Communication |Voluntary |Consumer dependency: | | |communication from the|possible negative word| | |sender |of mouth | |Audience reach |More effective |Control of reach is | | |targeting |within the hands of | | | |the sender | Table 3 A Selection of Fashion Social Network Sites |http://disneyrollergirl.blogspot.com/ |Blog site |http://www.stylebubble.co.uk/ |Blog site |http://into-thefray.com/blog/ |Online retailer with |http://www.ashadedviewonfashion.com/ |blogspot |http://anniespandex.com/ |Blog site |http://ilovecatparty.blogspot.com/ |Online retailer with |http://garbagedress.blogspot.com/ |blogspot |http://is-mental.blogspot.com/ |Blog site |http://jakandjil.com/blog/ |Blog site |http://kingdomofstyle.typepad.co.uk/ |Blog site |http://professionally-trendy.blogspot.com|Blog site |/ |Blog site |http://www.randomfashioncoolness.com/blog|Blog site |/ |Blog site |http://stylesalvage.blogspot.com/ |Blog site |http://doylesays.blogspot.com/ |Blog site with commercial |http://sarahrabia.blogspot.com |links |http://childhoodflames.blogspot.com/ |Blog site | |Blog site | | | | | | | | | | | | | | | | | | |